Raising Funds For Great Ideas


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Singapore Computer Society Digital Media Chapter Talk given by Bill Liu, Chairman & Managing Partner of Stream Global Pte Ltd

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Raising Funds For Great Ideas

  1. 1. SCS Digital Media Chapter Talk 23 March 2012“Raising Funds For Great Ideas” Bill Liu Chairman & Managing Partner Stream Global Pte Ltd
  2. 2. Content Introduction to Venture Funding Eco System For Funding – Private Investors/Government Schemes Investor’s Criteria Funding of Innovations/Start-Ups – Stream Media – Taggo – SyQic Capital- (IPTV) – Others Lessons Learnt
  3. 3. Financing Mechanisms at different stages of the Start-Up process High Founder, Friends, and Family Business AngelsLevel of Venture CapitalistsInvestment Non-financialRisk CorporationsAssumed EquityBy Investor Markets Commercial Banks Low Seed Start- Early growth Established up Stage of Development of Source: Onasbrugge et. al. (2000) Entrepreneurial Firm
  4. 4. Venture Capital Investing During Dot com Boom
  5. 5. Singapore’s Funding Eco SystemBusiness Plan CompetitionsAngel Investors (also Friends & Family)IncubatorsFirst Stage Funding – Venture Captial, Bank LoansGovernment Support –Equity, Debt, Tax IncentivesGrowth (Late) stage funding
  6. 6. Business Plan Competitions Startup @ Singapore – Since 1999: 2200 teams and 7000 participants todate – Grand winner $30,000, annual competition, Organiser: NUS Entrepreneurship Centre Lee Kuan Yew global business plan competition – US$60,000, (1st Prize US$36K) – biennial competition – Organiser: SMU Institute of Innovation & Entrepreneurship ideas.inc. Business Challenge (NTU) 1st prize S$15,000, (+ $15K for prototype for semi-finalists). Finalists get YES grants of $50K
  7. 7. Incubators– lowering initial costs Provideworkspace  Singapore’s Hotspots and shared – Fusionpolis administrative – Biopolis/Science Park resources – NRF TIS Scheme of 7 Incubators – NTU’s Technopreneuship Centre – NUS’ Entrepreneurship Centre – SMU Business Innovation Generator Help with fund-raising – The Enterprise @ Jurong East and marketing – iAxil @ Singapore Science Park – iHub @ Jurong East – Phase Z.Ro @ one-north – Soho @ Central Generalmentoring and – Technopreneur Center @ Ayer Rajah guidance – Technopreneur Center @ Bukit Merah – Technopark @ Chai Chee – Suntec City "HOT" stands for About 100 incubators "Hub of Technopreneurs” in Singapore
  8. 8. Private Investors Angel Investors Venture Capital
  9. 9. Where to find them? BANSEA – Business Angels Network of South East Asia –Annual membership Fee $200 –Membership Benefits  Information on deal flows & overseas contacts  Seminars & Networking Events ACE - Action Community for Entrepreneurship –Annual Events like BlueSky Innovation SVCA – Singapore Venture Capital and Private Equity Association DEALFLOW CONNECTION –An online Interactive platform to match fund seekers (eg Start- Ups, SMEs, etc) with sources of finance –finance ranging from debts, equities, OTC, venture funds, private placements as well as financial institutions. –http://www.dealflow.org.sg
  10. 10. Government Schemes forStart Ups In Singapore
  11. 11. NRF Technopreneur Incubation Scheme (TIS) Administered & Sponsored By National Research Foundation (NRF) Start-Ups less than 5 years old and less than $5M revenue Incubator, (eg Stream Global) co-invest with NRF in a start-up, where NRF funds 85% (up to S$500K) and Incubators funds the remaining 15% (S$88K) Funding is in the form of convertible Bond Bond is redeemable by Incubator Within 3 Years @ 5% interests p.a. Else NRF shall convert it into equity stakes in the Co. Founder must have substantial (> 50%) stake in the Co. 7 Incubators are into ICT, Digital Media, Clean Tech, Biotech, etc (Another 8 Incubators just added!)
  12. 12. SPRING Standards, Productivity and Innovation Board, Singapore Focusis to champion enterprise formation and growth –Funding resources –Network of valued relationships Works with partners to –Help enhance the productivity and innovation and capabilities of enterprises –Increase access to markets and business opportunities
  13. 13. Startup Enterprise Development Scheme (SEEDS) Administered By Spring $ match for funds raised with a third party investor Minimum of S$75,000 from third party/parties with initial funding of $300K Maximum funding of $1 million SPRING SEEDS Capital will match $2 for $1 raised by the company SPRING SEEDS Capital and the third-party investor(s) will take equity stakes in the company in proportion to their investments Start-Ups less than 5 years old Have paid-up capital of at least S$50,000, but not more than S$1 millionTodate – 185 Companies Received SEED Funding Since 2001 Totaling S$63M – More than 50% of SEED Enterprises Have Launched Products/Services
  14. 14. Young Entrepreneurs Scheme for Startups (YES) A S$25 million Entrepreneurial Talent Development Fund (ETDF) To encourage entrepreneurship among Singapore youths by providing seed money to co-fund their startups Grant of up to S$50,000 to turn Innovation/Idea into a business Singapore Citizens or PR below 26 years 1st-time entrepreneurs & Co less than 6 months Holds at least 50% equity at the time of application & will continue to do so for 18 months from time of funding SPRING Spore will match S$4 for every S$1 raised through self-funding, schools or third-party sources, the grant is capped at S$50,000. At least 50% raised comes from School/IHL
  15. 15. Media Development Authority (MDA) iJam (& soon iJam Reload) Scheme supports startups in their exploration of feasibility of technologies and ideas that have the potential to create business disruption and bold new Industry‘ in Interactive Digital Media (IDM) Up to S$50K for qualifying costs for IDM innovation/ Prototype for Singapore based start-ups Funds facilitated by Mentor Companies (10 appointed) Must exhibit R&D in either technology, creative, social or business model Can further tap grants from other schemes , viz Development Assistance, Production, Marketing & Talent Assistance Schemes
  16. 16. IDA Infocomm Start-up Programme (iSTART)iStart is a multi-pronged approach aimed to assist, facilitate and nurture Singapores ICT start-ups by increasing the depth and potential of our start-ups through various programmes and initiatives:- Creating Business-Savvy Entrepreneurs- Market Access for Start-Ups - Leveraging International Technologies to Accelerate Go-To-Market - Grooming the Local Developer Community Creating Vibrancy and Providing International Platforms for Start-Ups
  17. 17. Business Loan Scheme For Low Income - MicoCredit Business Scheme (MCBS) Person earning less than $30K p.a. & age > 18 years Loans from $5K to $50K (no collateral needed) 8%+ p.a. interests $5 M funding from Tote Board, administered by POSB MCBS teaming up with Chinese Development Assistance Council, Mendaki & Singapore Indian Development A to Asociation to reach out to more Singaporeans
  18. 18. Tax Exemption All startup automatically qualify for this. Start-ups in operation for less than 3 years can benefit from the tax exemption scheme. 100% tax exemption on the first S$100,000 of profits for up to 3 years. a further 50% exemption is given on the next $200,000 on a qualifying companys normal chargeable income The programs objective is to encourage entrepreneurial efforts by relieving the tax burden of young start-ups.
  19. 19. IE Singapore Double Deduction for Overseas Investment – Deduction of taxable income (two times foreign investment) Malaysia Singapore Third Country Business Development Fund (MSBF) Jointly With Malaysian Industrial Development Authority (MIDA). Local Enterprise and Association Development Programme (LEAD) – Supports SMEs developing new industries Trade Credit Insurance (TCI) – Protects against the non-payment risk of buyers Pathfinder program – Help nascent Singapore-based exporters increase overseas sales LIS II – Loan Insurance Scheme
  20. 20. Government Schemes forGrowth Stage Financing LEFS LETAS LIS GFP RFS
  21. 21. What Does A VC Look For????? Product Growth $$ People
  22. 22. What does a VC look for? The management team – More important than the idea, product Business plan – realistic? executable? Intellectual Property Rights – Barrier to entry? Scalability, Market Reach Free of Constraints and roadblocks i.e. legal and regulatory issues Exit Plan- Trade Sale, IPO, M&A?
  23. 23. www.movend.comGlobal Mobile In-App Payment Solution
  24. 24. MoVend: Mobile Vending Machine We build MoVend to be the vending machine on mobile To enable mobile transactions at every corner of the world
  25. 25. Global m-commerce is complicated  Handling multiple currencies, • Various forms of SDKs and API to exchange rate and business rules reach out to customers• Various types of payments
  26. 26. Facts• Developers spend on average 2-4 weeks integrating ONE payment SDK per “Arggg! Google In-App Payments application API is being a royal pain..…”• For China, Taiwan, Korea, Japan, Amazon - Kyle @stockholmux on Twitter, 19-Feb 2012 and variety of major geographical appstores, each come with their own SDK, and the payment flows are different How are you going to solve this problem? What if there is a single, integrated platform?
  27. 27. Features of MoVendAggregate payment solutions around the world into one SDK• Manage local currencies and flexible pricing• Digital rights management in-built• User management tools including parental control
  28. 28. Multi-platform Support Today, MoVend supports MoVend will also support
  29. 29. LEFS Local Enterprise Finance SchemeFixed rate financing (6.25%-6.75%) to –Upgrade, strengthen and expand operationsSPRING administered loans upto $15M for –Buying new machinery –Upgrading existing equipment –General working capital
  30. 30. What Does A VC Look For????? Product Growth $$ People
  31. 31. Our Key DifferentiationOur Role With Our Incubatees/Investees : Providing mentorship to entrepreneurs to help develop and refine their strategies and business models Assess and critique their technology, product and solution Determining the best practices & operational procedures Providing entrepreneurs with extensive network of contacts Fund raising & Value CreationWhat Are We Looking For? Committed and passionate Individuals with solid technical or business background Innovative, differentiated or big ideas that has high growth potentials Ability to build proprietary and strong IP 31
  32. 32. Get your fan discount when you pay.Simply give your mobile number to the cashier. Patents Pending
  33. 33. Free for merchants!Sponsored by banks and financial institutions. Credit Card Networks Banks
  34. 34. Fans get bigger discountsCharlie Brown Café, Singapore
  35. 35. Because merchants get word of mouthadvertising on Facebook
  36. 36. Fan clubs poweredby PayPalMerchants offer bigger discounts to fans,and get free Facebook advertising,sponsored by PayPal.Merchants will soon be able to partnerwith a number of banks and financialinstitutions using Taggo.
  37. 37. Taggo word of mouth campaigns are farmore effective than other methods Jessica got an exclusive fan benefit at Jolt Fashion with ABC Bank. Sometimes the best things in life are discovered through friends. 10X higher click-through rates than 20X higher click-through rates than traditional banner ads. average Facebook ads.
  38. 38. Value added advertising that promotesthe bank and its retail partners Jessica Tan Jessica got an exclusive fan benefit at Jolt Fashion with ABC Bank. - ABC Bank VS Jessica Tan likes ABC Bank Jessica Tan ABC Bank Jessica escaped to Italy at Giovanni’s Pizzeria with ABC Bank. - ABC Bank Without Taggo, Facebook ads only promote the bank. Jessica Tan Jessica is getting fit at Paradise Gym with ABC Bank. - ABC Bank
  39. 39. SyQic CapitalDiscovering Audiences, Uncovering Content
  40. 40. What It Does… Building Subscriber MassSyQic operates and manages all aspects ofvideo delivery over the internet to multipledevices, across multiple networks via itsproprietary platforms:- • Yoonic OTT IPTV – currently deployed for PLDT (Philippines) and Telekom Malaysia • YooMob – currently deployed for Maxis (Malaysia)All these deployments will build up subscribermass quickly and efficiently, utilising telcos’customer base and marketing resources
  41. 41. YooMobYooMob offers viewing of live and VODchannels optimized for mobile streamingHigh Quality streaming even at lowbitrates to access the masses
  42. 42. SyQic’s Value Proposition…Yoonic Storefront – The Content HubSyQic is now working on engaging end-usersdirectly by deploying its own StorefrontThe Yoonic Storefront aims to be the centre ofvideo distribution and consumption, linking thecontent providers with consumersLeverage on the subscriber mass built up fromSyQic’s current deployments with telcos for aheadstartTelcos will still be part of the ecosystem,benefiting from increased bandwidthconsumption and consumers from other markets
  43. 43. The Ecosystem Telcos /Content ISPsProviders Broadcas ters Provide access and QoS Supplies content to Supplies Yoonic content to Yoonic YOONIC Storefront Storefront STORE- Yoonic Storefront will FRONT provide CMS and supporting services to manage the content and Consumers will have the make it available to opportunity to access a consumers variety of content Consumers
  44. 44. Some Major ClientsPLDTSmart CommunicationsTelekom MalaysiaMaxisIndosatGlobe Telecom
  45. 45. a Team that can execute The People Management Team40 years combined operations experience in Broadcast the TV & Radio industry Operations Team Highly experienced operations & project management background R&D Team Pioneer in P2P-CDN software & middleware development Advisory TeamStrategic stakeholders with relevant industry experience and well networked to make things happen
  46. 46. Why did we invest? The management team – More important than the idea, product Business plan – realistic & executable Intellectual Property Rights – Barrier to entry Scalability & Market Reach Potentials Exit Plan- Potential Trade Sale & M&A (IPO?)
  47. 47. Why Some Ventures Fail To Get Funding? Lack Clear Business Model “Mee Too” Business, Little Differentiation Unrealistic Valuation Weak Team, Lack Leadership, Not Receptive To New Ideas/Advice Business Not Scalable
  48. 48. Reasons for Start-Up Faling Execution, execution, execution – Commercialization of new technology is also an art! Teamwork/Management Team – Non: cohesive, co-operative and focused Costs outstrip revenue Unwilling to change course or take remedial action Regulatory barriers/approvals
  49. 49. Stream Global’s Mission & Vision Grow a STREAM of highly promising start-up companies based in ASEAN but with GLOBAL Mission reach; focusing on Interactive Digital Media/Emerging ICT sector; partnering with passionate & capable entrepreneurs & delivering exceptional medium-term ROI to shareholders. Vision Premier S’pore based Venture Catalyst In IDM & emerging ICT2007 2008 2009 2010 2011 2012
  50. 50. Thank You For Your Attention!